Euro war

The news today is that Greece will receive about 110 billion euros over the next three years from the IMF and the EU. Greece will introduce further austerity measures.

Is that the end to this long running saga? No doubt not, the German government has to get approvals and will probably be contested in both parliament and the constitutional court. Maybe other countries will have problems. Although there is no great enthusiasm here in France to support the spendthrift Greeks there will be no contestation either. Greece has to make their measures stick too, they have an awful lot of work to do in modernising their economy and getting some proper financial control.

Maybe with hindsight it was wrong to let Greece into the euro, they just were not ready and should have waited longer. Message for Eastern Europe there. But on the other hand there is no guarantee that waiting would have helped, it is not sure that without the IMF and EU pressure, Greece would have been able to stand up to its public sector unions. Again Greece is small enough for the EU to handle, maybe it was better that we perfect our bailout procedures on a smaller nation rather than Spain say.

Although these are tough times, and I must admit I have been a bit disappointed with the German intransigence. Yes be tough to get movement, but by being overly tough Germany just risked destroying the Greeks motivation, creating a worse problem and stirring up a lot of anti German resentment which is always close to the surface. They also discovered that they can’t walk away from their economic hinterland.

They have been exciting times too. Building the federal Europe was never going to be easy. For those that believe that all is sweetness and light on the Continent, this incident has proven that some fairly strong tensions remain. But, and that is the essential point, we are holding together, the desire to be a political union here in Europe is strong enough to overcome the severest of crises, and make further steps on the road of ever closer union. Our new President has also scored a few points making sure that he was in on the key decision making.

The AS always help, the Goldman Sachs suspect lending and the rating agencies lack of transparency and objectivity helps to keep us united.